Fortescue Ltd (ASX: FMG) shares are pushing higher on Friday morning.
At the time of writing, the mining giant's shares are up almost 1% to $18.64.
This compares favourably to the performance of the ASX 200 index, which is down 0.45% at the time of writing.
Why are Fortescue shares rising?
Investors have been bidding the company's shares higher today after it made a big announcement.
According to the release, Fortescue has announced the successful syndication of a Renminbi denominated (RMB) syndicated term loan facility of 14.2 billion (approximately US$2 billion) with participation from leading Chinese, Australian, and international lenders.
The iron ore miner highlights that this is the first RMB Syndicated Term Loan of its kind by an Australian corporate. It believes this is a "landmark transaction" that reflects the depth of Fortescue's long-standing relationships in China.
Why is Fortescue raising funds?
The company advised that the proceeds from this syndicated term loan facility will be used for general corporate purposes and support Fortescue's ambitious decarbonisation agenda. This includes partnerships with Chinese suppliers and technology leaders.
It points out that Fortescue is a core supplier of iron ore to China and generates RMB revenues through its iron ore sales.
Commenting on the landmark transaction, Fortescue's executive chairman, Dr Andrew Forrest AO, said:
This isn't just a financial transaction. It's a signal of what is possible when partners are aligned in ambition. As the United States steps back from investing in what will be the world's greatest industry, China and Fortescue are advancing the green technology needed to lead the global green industrial revolution.
China continues to lead the world in industrial scale and innovation. Fortescue shares that ambition and drive. This landmark RMB financing strengthens our long-standing partnerships with Chinese institutions and opens new frontiers for collaboration.
This sentiment was echoed by group chief financial officer, Apple Paget. She said:
This financing deepens our engagement with existing financial partners and further expands our banking syndicate to institutions with Renminbi lending capabilities. The exceptional demand through the syndication process is recognition of Fortescue's strong credit profile, track record for operating excellence and disciplined capital allocation.
It marks another milestone in execution of our capital management strategy, diversifying funding sources, enhancing flexibility and lowering our cost of capital, including achieving Fortescue's lowest ever cost of debt. It reinforces our position as responsible custodians of capital.
